Full Table of Contents

• Government, Industry and Privatisation
• Full Table of Contents
• List of Figures
• List of Tables
• How to Use This Course

Modules

• Module 1 The Bargaining Economy
  • 1.1 Introduction
    • 1.1.1 Limitations on Government Actions
  • 1.2 Reasons for Government Control of Industry
    • 1.2.1 The Normative Approach
    • 1.2.2 The Positive Approach
  • 1.3 Method of Analysis
    • 1.3.1 Information Requirements
    • 1.3.2 Feedback Effects
  • 1.4 The Information Problem
    • 1.4.1 Moral Hazard
    • 1.4.2 Adverse Selection
  • 1.5 Private Interests and Government Policy
    • 1.5.1 Regulatory Capture
    • 1.5.2 Interest Group Pressure
  • Review Questions
    • Positive and Normative Statements
    • Method of Analysis
  • Further Reading and References
    • Further Reading
  • References
• 
  Module 2 Structure and Growth in Government
  • 2.1 Introduction
  • 2.2 The Economic Role of Government
    • 2.2.1 The Budget
      • The Place of Government in the Economy
  • 2.3 The Relative Size of Government
    • 2.3.1 Government Expenditure on Goods and Services as Proportion of the GDP
    • 2.3.2 Total Government Current Expenditure as Proportion of the GDP
    • 2.3.3 Government Employment as Proportion of Total Employment
  • 2.4 Growth of Government in Relation to the Economy
    • 2.4.1 Growth in Government Spending
    • 2.4.2 Growth in Government Employment
  • 2.5 The Causes of Government Growth
    • 2.5.1 Demand Factors
    • 2.5.2 Supply Factors
  • 2.6 Consequences of Growth in Government
  • Review Questions
    • The Economic Role of Government
    • The Relative Size of Government
    • The Growth of Government
  • Further Reading
  • References
• 
  Module 3 Regulation (1): Competition Policy
  • 3.1 Introduction
  • 3.2 Regulation and Market Structure
    • 3.2.1 Natural Monopoly
  • 3.3 Potential Competition and ‘Contestability’
    • 3.3.1 Contestability and Natural Monopolies
  • 3.4 Rate of Return Regulation
    • 3.4.1 Possible Consequences of Regulation
  • 3.5 Price Regulation
    • 3.5.1 Drawbacks of Price Regulation
  • 3.6 Competitive Bidding
    • 3.6.1 Auction Systems
      • (i) Defining Quality
      • (ii) Contract Duration
      • (iii) Asset Valuation
      • (iv) Specific Human Capital
    • 3.6.2 Summary
  • 3.7 Monopolies and Mergers
    • 3.7.1 The Cost–Benefit Approach to Monopoly and Mergers Policy
      • (i) High Profit Rates
      • (ii) A Concentrated Industry Structure
      • (iii) Excess Capacity in a Monopoly Industry
      • (iv) Advertising
      • (v) Pricing Policy
  • 3.8 Restrictive Agreements
    • 3.8.1 Vertical Agreements and the Law
    • 3.8.2 The 1998 Competition Act in the UK
  • 3.9 Conclusion
  • Review Questions
    • The Efficiency Costs of Monopoly
    • Natural Monopoly
    • Comparing Regulatory Schemes
    • Restrictive Practices Legislation
  • Further Reading
  • References
• 
  Module 4 Regulation (2): Environmental Policy
  • 4.1 Introduction
  • 4.2 Development of Environmental and Safety Regulation
    • 4.2.1 The Health and Safety at Work Act 1974
    • 4.2.2 The Environment Agency (EA)
  • 4.3 External Costs of Production
    • 4.3.1 Collective Action
    • 4.3.2 Agreement Between Affecting and Affected Parties
  • 4.4 Instruments of Environmental Policy
    • 4.4.1 Property Rights
    • 4.4.2 Taxes and Charge
    • 4.4.3 Subsidies
    • 4.4.4 Regulatory Standards
    • 4.4.5 Marketable Pollution Licences
  • 4.5 Implementation and Enforcement Problems
    • 4.5.1 Information on Environmental Damage
    • 4.5.2 Information on Abatement Costs
    • 4.5.3 Complexity
    • 4.5.4 Monitoring and Metering
    • 4.5.5 Policing and Enforcement
  • 4.6 Conclusion
  • Review Questions
    • External Costs
    • The Polluter-Pays Principle
    • Abatement Costs
  • Further Reading
  • References
• 
  Module 5 Government Purchasing
  • 5.1 Introduction
  • 5.2 The Market Environment
    • 5.2.1 Bi-lateral Monopolies
    • 5.2.2 Alternative Government Procurement Policies
  • 5.3 Some Economics of Government Purchasing Policies
    • 5.3.1 The Government as Monopsonist
    • 5.3.2 The Government in a Position of Bi-lateral Monopoly
    • 5.3.3 The Problem of Uncertainty
  • 5.4 Conclusion
  • Review Questions
    • Tendering for Government Contracts
    • Profit and Cost Constraints
    • The Profit Formula
  • Further Reading
  • References
• 
  Module 6 Government Control of Private Industry: Subsidies
  • 6.1 Introduction
  • 6.2 The Choice of Aims
    • 6.2.1 Three Structural Policies
      • (a) The maintenance of employment
      • (b) Encouragement of exports and import substitution
      • (c) Encouragement of investment in fixed capital and research and development (R and D)
  • 6.3 Forms of Financial Inducement
    • 6.3.1 Types of Financial Instrument
      • (i) An explicit payment
      • (ii) An implicit payment
    • 6.3.2 Economic Coverage
      • (i) Broad-base subsidies
      • (ii) Intermediate-base subsidies
      • (iii) Narrow-base subsidies
    • 6.3.3 Output and Input Subsidies
    • 6.3.4 Direct and Indirect Subsidies
  • 6.4 Some Economics of Subsidies
    • (a) The politician
    • (b) The civil servant
    • (c) The technical adviser
  • 6.5 Government Subsidies in an Open Economy
  • 6.6 Conclusions on Subsidy Management
    • (a) Changes in political ideology
    • (b) Changes in economic analysis of policy
    • (c) Changing perceptions of the efficacy of subsidy measures
  • Review Questions
    • Volume and Extent of Subsidies
    • Formulating Subsidy Rules
    • Alternative Subsidy Strategies
  • Further Reading
  • References
• 
  Module 7 The Government as Producer (1): Non-marketed Output
  • 7.1 Background
  • 7.2 The Economic Analysis of Bureaucracy
    • 7.2.1 Bureaucracy as Monopoly
      • (a) Is the government bureau the sole supplier of the product?
      • (b) Do the ‘purchasers’ of the public service, i.e. the government in power, react to a fall in price by increasing the quantity demanded?
      • (c) What does the ‘manager’ of the bureau maximise?
  • 7.3 Difficulties in Testing the Model
  • 7.4 Improving Government Production Efficiency
    • 7.4.1 Auditing Government Expenditures
    • 7.4.2 Introducing Market Forces
    • 7.4.3 Contracting out
  • 7.5 Conclusion
  • Review Questions
    • The Model of Bureaucracy
    • Charging for Public Services
  • Further Reading
  • References
• 
  Module 8 The Government as Producer (2): Marketed Output of Public Enterprises
  • 8.1 Introduction
  • 8.2 What is a Public Enterprise?
    • 8.2.1 Classification by Source of Control
    • 8.2.2 Classification by Property Rights
    • 8.2.3 Classification by Source of Revenue
  • 8.3 Public Enterprise – Historical Trends
    • 8.3.1 The Public Enterprise as Natural Monopoly
    • 8.3.2 From Public to Private Sector
  • 8.4 The Rise and Fall of the Public Interest Approach
    • 8.4.1 Market Failure
      • (a) The marginal cost pricing rule
      • (b) Investment appraisal
      • (c) Financial constraints
    • 8.4.2 The Fall of the Public Interest Approach
  • 8.5 Property Rights and Public Enterprises
  • 8.6 Private and Public Enterprise: Comparative Performance
    • 8.6.1 Economic Performance
    • 8.6.2 The Impact of Property Rights on Performance
    • 8.6.3 The Influence of Competition on Performance
    • 8.6.4 Comparisons between Ownership Types
  • 8.7 The Control of Public Enterprise
    • 8.7.1 Performance Indicators for Public Enterprises
      • Financial targets
      • Efficiency targets
      • Efficiency audits
      • Yardstick competition
      • Managerial remuneration
      • Competition in the product market
    • 8.7.2 Performance Contracts for Public Enterprises
  • 8.8 Conclusion
  • Review Questions
    • The Size of the Public Enterprise Sector
    • Institutional Structures and Managerial Constraints
    • Measures of Productivity
  • Further Reading
  • References
• 
  Module 9 Privatisation and Deregulation
  • 9.1 Introduction
    • 9.1.1 Privatisation
    • 9.1.2 Deregulation
    • 9.1.3 Liberalisation
  • 9.2 The Transfer of Assets to the Private Sector
    • 9.2.1 The Progress of Privatisation
    • 9.2.2 Privatisation and Natural Monopoly
  • 9.3 Deregulation
    • 9.3.1 Regulatory Growth: A Brief History
    • 9.3.2 Regulation and Private Interests
      • Who gained when the agencies were setup?
      • What were the effects of regulation?
    • 9.3.3 Effects of Deregulation
  • 9.4 Liberalisation
    • 9.4.1 Removing Restrictions on New Entry
    • 9.4.2 Competitive Bidding for Natural Monopoly
    • 9.4.3 Contracting Out
  • 9.5 Conclusion
  • Review Questions
    • Privatisation
    • Liberalisation
  • Further Reading
  • References

Appendices

• Appendix 1 Answers to Review Questions
  • Module 1: The Bargaining Economy
    • Positive and Normal Statements
    • Method of Analysis
  • Module 2: Structure and Growth in Government
    • The Economic Role of Government
    • The Relative Size of Government
    • The Growth of Government
  • Module 3: Regulation (1): Competition Policy
    • The Efficiency Costs of Monopoly
    • Natural Monopoly
    • Comparing Regulatory Schemes
    • Restrictive Practices Legislation
  • Module 4: Regulation (2): Environmental Policy
    • External Costs
    • The Polluter-Pays Principle
    • Abatement Costs
  • Module 5: Government Purchasing
    • Tendering for Government Contracts
    • Profit and Cost Constraints
    • The Profit Formula
  • Module 6: Government Control of Private Industry: Subsidies
    • Volume and Extent of Subsidies
    • Formulating Subsidy Rules
    • Alternative Subsidy Strategies
  • Module 7: The Government as Producer (1): Non-marketed Output
    • The Model of Bureaucracy
    • Charging for Public Services
  • Module 8: The Government as Producer (2): Marketed Output of Public Enterprises
    • The Size of the Public Enterprise Sector
    • Institutional Structures and Managerial Constraints
    • Measures of Productivity
  • Module 9: Privatisation and Deregulation
    • Privatisation
    • Liberalisation
• 
  Appendix 2 Practice Final Examinations
  • A2.1 Practice Final Exam 1
  • A2.2 Answers to Practice Final Exam
• 
  Index